BILL ANALYSIS

H.B. 3637

By: Troxclair

Ways & Means

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The bill author has informed the committee that frequent droughts and rising demand for water in Texas are straining existing water supplies and that many rural Texans who often rely on private wells or limited municipal water sources are especially vulnerable to these shortages. The bill author has also informed the committee that while rainwater harvesting and graywater systems offer a practical solution because they reduce dependence on traditional water sources and lower utility costs, the high initial cost of installation can discourage many property owners from using these systems. H.B. 3637 seeks to incentivize water conservation efforts by allowing a county commissioners court to adopt an exemption from property taxation of the portion of a property's appraised value that is attributable to the installation in or on the property of a rainwater harvesting or graywater system.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 3637 amends the Tax Code to authorize a county commissioners court by order to adopt an exemption from property taxation of the portion of the appraised value of a person's property that is attributable to the installation in or on the property of a rainwater harvesting or graywater system. Such an exemption adopted by a commissioners court applies to the taxation of property by each taxing unit that taxes the property. The bill defines "graywater" by reference to applicable Health and Safety Code provisions as wastewater from clothes-washing machines, showers, bathtubs, hand-washing lavatories, and sinks that are not used for disposal of hazardous or toxic ingredients, not including wastewater that has come in contact with toilet waste, from the washing of material, including diapers, soiled with human excreta, or from sinks used for food preparation or disposal.

H.B. 3637 applies only to property taxes imposed for a tax year beginning on or after the bill's effective date.

EFFECTIVE DATE

January 1, 2026, if the constitutional amendment that authorizes a county commissioners court to exempt from property taxation by each political subdivision that taxes the property the portion of the assessed value of a person's property that is attributable to the installation in or on the property of a rainwater harvesting or graywater system is approved by the voters.